Land Readjustment for Transit-oriented Suburbanization and Land Value Capture The case of Tsukuba Express and the Kashiwanoha Campus Township Japan Project Brief Background and Objectives Tsukuba Express is the latest large-scale suburban rail extension that integrates private housing development and public infrastructure investment in the Tokyo Metropolitan Area. The 58.3-km line with 20 stations came into operation in 2005 to offer fast travel between central Tokyo (Akihabara) and the nation’s largest research hub (Tsukuba Science City) by serving several satellite towns across four prefectures. The new train service takes around 45 minutes from end to end at the maximum speed of 130 km per hour. When the development plan of Tsukuba Express was proposed, the demand for housing was rapidly swelling over Tokyo and the existing commuting line around the northeast area of Tokyo was seriously congested as there were no alternative modes and routes in the area. To meet the surging demand for both suburban housing and transportation capacity, the national government enacted the Housing-Railway Integration Law of 1989 for the development of Tsukuba Express. Two years later, the Metropolitan Intercity Railway Company was established jointly with several local governments and private entities along the new railway corridor. The company skillfully took advantage of zero- interest loans and land readjustment projects to reduce the cost of rail construction, since other suburban rail lines struggled with the payment of loan interests during the 1980’s and 1990’s. Project Overview Kenkyu-gakuen Tsukuba Banpaku-kinenkoen Midorino Special Land Readjustment Practices Major town developmentarea Miraidaira The national government introduced a “special” Ibaragi Prefecture land readjustment approach that aims to Moriya supply a large volume of new housing lots into Kashiwanoha-campus Kashiwa-Tanaka the high-demand market together with fast rail Saitama Prefecture infrastructure and services to and from central Nagareyama-otakanomori Nagareyama-centralpark Tokyo. Along the Tsukuba Express line, 18 Minami-Nagareyama districts around 13 stations were designated Misato-chuo Yashio for special land readjustment projects, Tokyo Rokucho accounting for about 2,903 hectares (Figure 1). Kita-Senju Aoi Chiba Prefecture Minami-Senju Asakusa Shin-Okachimachi Akihabara Source: Produced by author based on Tsukuba Express Town Map, Urban Renaissance Agency. Land Readjustment for Transit-oriented Suburbanization and Land Value Capture Under the Housing-Railway Development Law, the prefectural governments, Urban Renaissance Agency, and municipal governments could proactively obtain the land parcels contributed by individual private land- holders through the land re- adjustment scheme. Upon an approval of the project, the contributed land parcels were partially replotted for the railway facility uses transferred to the former Railway Construction Agency at the assessment price, while the other contributed parcels were sold for private property development around newly coming stations. Using this scheme, the public entities could save land acquisition costs, promote transit- Source: Suzuki, H., Muyrakami, J. Hong, Y., Tamayose, B. 2015. Financing Transit-oriented oriented development with land values, Adapting Land Value Capture in Developing Countries. The World oriented developments, and Bank.https://openknowledge.worldbank.org/handle/10986/21286 attain a sufficient volume of passengers soon after the train service came into estate giant originally owned the former golf operation (Figure 2). course. The company reinvested in a new shopping mall, residential tower packages, and community health centers, including the Kashiwanoha Campus Station innovative elements of Smart City. The area Kashiwanoha Campus Station at 32 km energy management system invented by northeast from the core of Tokyo was one of advanced technology companies connects the innovative transit-oriented land building facilities (e.g., commercial and readjustment applications along Tsukuba residential buildings, offices, hotels) and Express. Initiated by the Chiba prefectural electrical facilities (e.g., solar panels and government, a 272.9-hectare district was batteries) through a smart grid, which designated for land readjustment and interchange electrical power inside the district converted from a former golf course, green cost-efficiently and reserve backup power in fields, and small factories to developable land cases of natural disasters. In addition to the parcels for residences, offices, and other cutting-edge hardware, a series of community variety of purposes. The total asset price events and placemaking efforts have been increased 42% before and after the land promoted to increase its neighborhood image readjustment project1. In addition to the and, in turn, the whole asset values. The prefectural government’s arrangements, local station area is forming a cohesive knowledge efforts of landholders, developers, and hub by involving two universities in successive communities characterized this new suburban urban design workshops and town meetings. township. Mitsui Fudosan Corporation is a real Page | 2 Japan Project Brief Project Impacts Lessons Learned Economic Impact: The comprehensive rail and Private rail projects have historically been housing development contributed to revitalize integrated with real estate and other related the local economies of the many cities and businesses in Tokyo during the rapidly growing towns across the four prefectures. The number periods. By contrast, the Tsukuba Express of housing and residents also grew along the project under the gradually slowing periods corridor at a higher pace than that estimated. was successfully led by the local governments Consequently, the land prices in 1.5 km of the using land readjustment techniques in a stations significantly increased from 2005 to special way. This public initiation was 2010. Importantly, the new rail line successively followed by major developers and successfully turned profitable within five years other private stakeholders. Key lessons from after it came into operation, while the original Tsukuba Express and Kashiwanoha Campus are plan estimated to achieve the positive summarized below. turnaround 20 years after. Public Initiative for Land Social Impact: Assemblage: The high-amenity housing development Local governments along a new suburban line package provided around suburban stations can play a pivotal role in land assemblage for have been attracting a number of relatively both railway and housing development. Under young households with children. These new market freehold systems, inclusive land residents with private developers have been adjustment schemes could be effective to playing an important role in energizing and economize urban infrastructure costs and creating unique cultures and lifestyles along produce transit-oriented built environments the corridor. Old residents also enjoy the together with new rail stations, if land use newly created residential amenities and city planning and development incentives are access services brought by the integrated attractive enough for individual landholders to housing-railway projects. make contributions to the districts designated. Environmental Impact: Private Contribution for Long- The railway operator and the developers made term Township: large efforts to reduce the energy consumption and CO2 emission generated Major developers, key landholders, and from the newly developed district. Tsukuba academic institutes along new rail lines need to Express introduces a variety of ecofriendly be involved in not merely raising urban capital systems (e.g., solar panels on station roof, no funds for short-term profits but rather railway crossing, trains without polishing) to establishing transit-oriented township in the their facilities. In several new satellite towns, long run. In general, these private stakeholders the developers challenge to harmonize the are likely to provide high-quality urban settings new township development with the existing and state-of-the-art smart technologies natural setting by preserving large-scale forest around stations, as motivated to take and parks around the stations and promoting advantage of the accessibility benefits brought community-based environmental activities. by new rail development and maximize their Moreover, some smart technologies (e.g., own asset values with a good image of town smart grid in Kashiwanoha Campus) were management. The novel concepts introduced incorporated into town infrastructure to by private entities tend to attract younger efficiently reduce energy consumption in the generations who would prefer transit-oriented region. lifestyles and shape unique communities for the next decades or more. Such an intergenerational business strategy is of Page | 3 Land Readjustment for Transit-oriented Suburbanization and Land Value Capture particular importance for developers and universities in a shrinking society. Future Challenges Land readjustment practices might result in uneven development along a new rail line, as the quality of township depends on local efforts and development progresses around each station. Corridor-wide initiatives should be introduced to regenerate synergetic effects across different districts. Also, metropolitan- wide rail network extensions from the new science corridor to the central business district, airports, and other sub-employment centers would further accelerate